Europe VS cryptos: what is the purpose of the law proposed by the European Commission?

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2 years ago

Proposed changes to EU legislation would force companies that transfer Bitcoin or other cryptoassets to collect data on the recipient and sender. According to the European Commission, the proposals would make cryptoassets more traceable and help curb money laundering and terrorist financing.

It seems that China is not the only government that wants to stand up to Bitcoin. Europe wants to track all cryptocurrency transactions. To this end, the European Commission has presented this week a legislative proposal that contemplates requiring cryptocurrency exchanges such as Binance to include the personal data of their customers. With this law, and in pursuit of greater transparency and traceability of crypto payments, anonymous wallets would be banned in the EU (where anonymous bank accounts are already prohibited).

Europe vs Bitcoin

While Europe already has rules in place to combat money laundering, laws proposed this week would extend that red tape to "the entire cryptocurrency sector, forcing all service providers to conduct due diligence on their customers," the European Commission announced this week. Officials also want to limit all cash payments to €10,000 in all member states, which will make it harder to move large amounts of money. EU countries with lower limits will be able to keep them.

Mairead McGuinness, European Commissioner for Financial Services, Financial Stability and Capital Markets Union:

"MONEY LAUNDERING POSES A CLEAR AND PRESENT THREAT TO CITIZENS, DEMOCRATIC INSTITUTIONS AND THE FINANCIAL SYSTEM."

"The scale of the problem cannot be underestimated and loopholes that criminals could take advantage of need to be closed. Today's package significantly intensifies our efforts to prevent dirty money from circulating through the financial system."

The European Commission vs Bitcoin

The commission has suggested the creation of an Anti-Money Laundering Authority (AMLA) to ensure compliance with these rules. This unit will work directly with financial institutions and will supervise "some of the riskiest financial institutions operating in a large number of member states or requiring immediate action to address imminent risks."

"Every new money laundering scandal is one scandal too many, and a wake-up call that our work to close the loopholes in our financial system is not yet finished," said Valdis Dombrovskis, EU Trade Commissioner.

"We have come a long way in recent years and our EU [anti-money laundering] rules are now among the strictest in the world. But they now need to be applied consistently and monitored closely to make sure they are actually enforced. That's why today we are taking these bold steps to close the door on money laundering and stop criminals lining their pockets with ill-gotten gains."

Two major changes proposed by the EU for cryptocurrencies

Personal data of exchange users

Proposed changes to EU legislation would force companies that transfer Bitcoin or other cryptoassets to collect data on the recipient and sender. According to the European Commission, the proposals would make cryptoassets more traceable and help curb money laundering and terrorist financing.

Under the proposals, a company transferring cryptoassets for a customer would be required to include their name, address, date of birth and account number, as well as the name of the recipient.

End of anonymous wallets

The new rules would also prohibit offering anonymous cryptoasset wallets. The proposals could take two years to become law. The Commission argued this week that cryptoasset transfers should be subject to the same anti-money laundering rules as wire transfers.

"Given that virtual asset transfers are subject to similar money laundering and terrorist financing risks as bank transfers... it therefore seems logical to use the same legislative instrument to address these common issues," the Commission wrote.

While some cryptoasset service providers are already covered by anti-money laundering rules, the new proposals "would extend these rules to the entire cryptocurrency sector, obliging all service providers to apply due diligence to their customers," the Commission explained.

David Gerard, author of Attack of the 50 Foot Blockchain, has stated that this regulation "only aims to apply existing rules to cryptocurrencies, in force since 2019", as we can read in the BBC. And he continues: "if you want to make real money, you have to follow the real money rules". Gerard believes that, although this is a series of European proposals, their impact would reach much further.

France already proposed this month to give more power to the Paris-based European Securities and Markets Authority (ESMA) and make it responsible for overseeing cryptocurrencies across the EU. French regulators strongly believe that cryptocurrencies need EU-wide regulation.

To become law, the proposals will need the agreement of member states and the European Parliament. If Europe goes ahead with the proposed legislation, it is expected to come into force from 2024.

CONCLUTION

in my personal opinion this recommendations are highly recommendable measure of course we do not know for sure how it will affect us as regular users due to the bad use that have become the cryptomenda in many illicit acts such as financing terrorist cells or buying weapons or drugs of course obvious reason to put some regulations of course we like freedom but sometimes it can be dangerous so much freedom the idea is that it will be plans or proposal almost impossible because it may receive with the refusal of users, since it would be removing a little of the decentralization that we have taken away from the banks for years and have a full financial freedom of course we will only see in the coming years to see what happens with all this.

See you guys in a future article...

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Why the hell would anyone comply with the laws of terrorstates?

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